You must Sign In to post a response.
  • Category: Tax Planning

    Tax rebate on home loan interest if construction period is more than 5 years


    Have a query about home loan interest in case the construction period is beyond 5 years? Searching for detailed information about the rules for tax rebate? Find advice from our ISC experts here regarding how to handle such a situation.

    My husband booked a flat in 2010 and took a home loan for Rs 20 lakhs. In due course he has repaid the loan but the builder has not completed the construction till date.
    So what about the tax rebate on interest paid against home loan?
    As far as I know the tax rebate can be asked only if construction is over and construction should be over within 5 years of starting the home loan.
    Also how much tax rebate can be asked as construction period has crossed more than 5 years?
    If the builder has defaulted then my husband should not suffer as it is not his fault. What can be done?
  • Answers

    1 Answers found.
  • You can claim the tax rebate only when the construction is complete and the property is acquired by the buyer. After that the interest paid on the loan can be shown in five equal instalments in the following years to claim the benefit under section 24 of the income tax. Only thing is you have to get a detailed year wise break up of the loan interest you have paid to the lender. This document is essential to support your claim for deduction of interest amount from your income in the income tax return.

    If the builder is not completing the construction then it will be better to lodge complaint against him as he will be penalised for that as per the rules and regulations in the matter. He will have to abide by those regulations. Under that threat he may complete the construction work in time. What I will suggest is talk to the other buyers also and lodge the complaint to the concerned authorities. A collective approach and action yields fruitful results in such cases.

    Knowledge is power.


  • Sign In to post your comments